Saudi opposition collapses oil freeze talks
Attempts by some of the world’s biggest oil producers to freeze output ended without a deal on Sunday night, after Saudi Arabia insisted Iran should be part of any agreement.
Talks in Doha aimed at achieving the first global oil deal in 15 years, which had appeared to be on course earlier in the day, broke up late on Sunday night as ministers failed to overcome opposition from Riyadh, which had hardened its stance in recent days.
The failure to reach an agreement risks setting off another drop in the oil price, with tensions between Saudi Arabia and its regional rival Iran proving too great to overcome.
Mohammed Bin Saleh Al-Sada, Qatar’s energy minister, said: “We all need time for further consultation.”
Delegates said Saudi Arabia had in effect torn up an earlier draft of the deal as it decided it could not be party to an agreement that would give Iran any leeway. Tehran had refused to join the freeze as it rebuilds its oil exports after years of sanctions.
Iran did not send a representative to the meeting, which was attended by major non-Opec producers such as Russia and Mexico, alongside countries from the cartel. Together they represent almost half of global crude production.
“The whole world was waiting for this to happen. We were all positive this morning,” said one delegate before the end of the meeting. “If it doesn’t, this is not good. If there is not a positive statement the price of oil will be down $5 [a barrel] tomorrow.”
Oil prices have already rallied from below $30 a barrel in mid-January to $43 at the end of last week, partly due to the plans for an output freeze that were led by Qatar, Russia and Saudi Arabia.
A second draft that had been circulating last night suggested a freeze would only take place if “all major exporting nations” were unanimous on a deal.
Saudi Arabia said in late 2014 that it did not care if oil prices slid to $20 a barrel, but it had recently indicated a shift in its approach amid pressure on the country’s finances.
A senior Opec delegate said last month that the Saudis would comply with an output freeze, even without Iran’s involvement. But the country’s deputy crown prince, Mohammed bin Salman, said last week that Saudi Arabia would not sign up without Tehran.
“We are very very disappointed,” said Falah Alamri, the Iraqi representative. “This will effect the [oil] price and our earnings. We wanted a deal”